Presidential Executive Order: “Buy American and Hire American”

On April 18, 2017, President Trump signed the “Presidential Executive Order on Buy American and Hire American.” The phrase, “Hire American,” generally refers to the body of law and policy concerning how our immigration, visa, and guest worker programs are operated to ensure proper protections for American workers.

The Executive Order calls for enforcing the guest worker programs (H-2A temporary agricultural workers and H-2B temporary non-agricultural workers, e.g., Resort and Hospitality Services, Retail Sales, Landscaping, Food Service and Processing, and Construction) in a way that they do not become a means for replacing or undercutting American labor at less cost.

The Executive Order has an additional clause on the H-1B visa program, and calls on the various federal agencies to put forward reforms to see to it that H-1B visas are rewarded to the most skilled or highest-paid applicants. This proposed change relates to the H-1B cap, which is a lottery-based system. The administration wants the H-1B cap or the limited 85,000 visas per year to be awarded to the most skilled or highest-paid applicants.

The heightened attention around Trump’s immigration executive orders underscores one key point about this feature of any presidency: orders are not necessarily final and not automatically the policy of the land. The travel bans are a prime example, both Executive Orders have been enjoined by the courts and they cannot be enforced as they have both been found to violate the U.S. Constitution. While the federal agencies are now being asked to undertake a review of the H-1B program, the reality is that many of the changes contemplated by the administration will require legislative action, or at minimum, the lengthy rulemaking process. The Executive Order, though, is written with an understanding that the H-1B program is needed to fill vacancies for specialty occupations or high-skilled workers (meaning a position that requires a bachelor degree or higher plus specialized knowledge to perform the job duties), but it should be changed to award H-1B visas to the most skilled or highest-paid applicants. Right now, under the H-1B cap lottery system, a lowered paid occupation or a less skilled worker could be awarded one of the limited H-1B numbers over a higher paid or higher skilled worker. The Executive Order does not include one important criterion (and possibly a future regulation will do so), which is selection based on the highest need, e.g., vacancies in an occupation compared to the number of available applicants.

Recruitment for vacancies in healthcare can span years in a very competitive marketplace, and in some disciplines, only a handful are matriculated per training cycle. As the American population continues to grow and lifespan longevity expands, combined with newer physicians wanting less-strenuous work schedules and “fuller lifestyles” – and unless more physicians are trained, we presumably will continue to experience a shortage of physicians and allied healthcare workers, e.g., nurses, medical technologists, et cetera. The American Medical Association (AMA) has taken the lead to determine policy direction in addressing the issue for physicians, but even so, it takes many years to educate and train physicians. It is hard to grow the number of residency positions in the short-term to meet the surge, which is also generally the gateway to fellowship or specialty and subspecialty training. Medicare, the chief funder of residency positions, has not increased the number of funded positions since 1997. In sum, it is a complicated issue. As populations age in urban and rural parts of the state and region, hospitals and clinics rely on foreign medical graduates trained in the United States to fill vacancies in federally designated medically underserved areas. Also, under the H-1B laws, an employer must pay the “required wage rate,” which is defined as the actual wage paid to similar workers (internal pay scale) or the prevailing wage (external or the competitor’s pay scale, e.g., paid in the community at-large), whichever is higher. There is a safeguard built into the law right now to protect both U.S. workers and foreign workers based on the “required wage rate” requirement.